Wealthy class-action lawyers can count on another friend in the Obama administration. The president recently tapped Elizabeth Warren as an end-run appointee to establish the new federal agency known as the Consumer Financial Protection Bureau. The choice is raising eyebrows because, as Bloomberg News reported, Ms. Warren took $90,000 from a Miami plaintiffs’ firm to serve as an expert witness in a lawsuit against major American banks, including Bank of America Corp., Citigroup Inc. and JPMorgan Chase for alleged antitrust violations related to credit-card processing rates.
At the same time she took this money, Ms. Warren was head of the Congressional Oversight Panel keeping tabs on the $700 billion bank bailout. This bailout money was being doled out, in large measure, to the aforementioned three firms. Now Ms. Warren will create a government agency with regulatory authority over firms against which she has testified. She will help write the rules for the very matters covered in the lawsuit.
It’s hard to imagine a more glaring conflict of interest, but Ms. Warren insists that the oversight panel’s ethics counsel cleared the arrangement. That may be so, but the U.S. Senate has been denied the opportunity to clear this appointment. Instead of submitting her name to the appropriate committee for confirmation, Mr. Obama made Ms. Warren a special adviser, evading the inevitable questions regarding her suitability that would have been raised during an open congressional hearing.
Ms. Warren joins the likes of Health and Human Services Secretary Kathleen Sebelius, former head of the Kansas Trial Lawyers Association, in prominent administration roles. Former Democratic National Committee Chairman Howard Dean illustrated the trial bar’s influence last year when he admitted that lawsuit reform had been kept out of Obamacare to keep trial lawyers happy. This is no surprise, considering their lobbying group contributed 91 percent of its campaign cash to Democrats.
With consumer finance entrusted to Ms. Warren, it is no wonder American businesses remain in a defensive crouch, afraid to invest in the nation’s economy.
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